Tuesday, June 10, 2008

As gas prices have risen, demand has begun to fall. According to Mastercard Advisors, demand for U.S. retail gasoline has fallen 3.8 percent from last year. Year to date demand is down 1.9 percent from last year.

Which means we've hit a pivot point for how much people will take from gas prices. As oil prices continue to hit record highs, pushing gas prices up, people are starting to drive less.

The good news is lower demand will keep a downward pressure on oil prices. The bad news is it doesn't seem to be enough as oil jumped up again this morning (not to a record high for once, but still...).

In case you're wondering, the surge in oil price this morning comes from worldwide demand still increasing, even as it falters in the U.S.

"The four-week moving average, which tends to smooth seasonal fluctuations, indicates that Americans are changing driving habits and consuming less gasoline," McNamara said.

Too bad more hybrids aren't available right now. The likelihood of selling cars that promise better fuel economy gets better every time the price of gas rises. But limitations on battery supplies have cut sales, leading to waiting lists and increased pricetags at the dealerships.

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